Fundamental overview:
GBP/JPY is to consolidate with a bullish bias. It is supported by the weak yen sentiment after Bank of Japan on Friday unexpectedly announced it would expand its bond purchases to 80 trillion yen a year from the previous target range of 60 trillion yen to 70 trillion yen and sterling demand on soft EUR/GBP cross. But GBP/JPY gains are tempered by sell-GBP orders from Japan's exporters.
Technical comment:
Daily chart is positive-biased as MACD and stochastics are bullish, although the latter is in the overbought zone, five-day moving average is above 15-day MA and is advancing.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 183 and the second target at 184.05. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 177.80. A break of this target would push the pair further downwards and one may expect the second target at 177. The pivot point is at 178.95.
Resistance levels:
184.05
183
182.45
Support levels:
177.80
177
176.25
